Help! My credit score isn't going up!

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Help! My credit score isn't going up!

Postby reychan » Thu May 23, 2013 4:36 pm

Hello forum, new member and first post here,

A little over a year ago i had had roughly a 715 score before applying to and getting my first auto loan approved.

I had just one bank credit card for just a year and a half prior to that so it was difficult to get an auto loan due to my lack of credit history despite a good score, but somehow managed to get a reasonable interest rate as well...considering my limited credit history.

I had heard loans of any sort to have a much more serious impact on credit score than credit cards, and was expecting a good credit boost after maintaining on time installment payments over a 12 month period, as well as making early payments on my credit cards every month so i did not pay any interest or have any balance carrying over on my credit card.

I had applied for a credit line through my bank after the 12 month mark of maintaining my auto loan and much to my dismay was rejected and even more to my dismay got my rejection letter with my hard pull results at 705, a slight dip after expecting a big jump from the auto loan! This is the point where I decided I need to get educated and start building my credit up to make up for this wasted year. The only thing that i was able to pin my credit score drop was on was using a higher than ideal credit-debt ratio on my credit card (usually 50%-80% and rarely under 30%). Ive read that debt-credit ratio makes up 30% of your credit score, but would that be enough to effect my credit like it did? or do you suspect there may be other causes of my outcome?

I feel like i may not be doing what im trying to achieve properly and possibly have been mistakenly carrying over a balance when I think I am is a question to everyone, what would the ideal day of the month for me to pay off my full balance to achieve BOTH avoiding interest and carrying a $0.00 balance from statement to statement on this particular card. My statement closes on the 6th of the month and my minimum payment of $25 is due on the 1st of the following month. The wells fargo credit department has given me different answers on this every time i call in to ask...(thank god AMEX is so much simpler)

Another issue i have had is over the past two years my credit limit on my credit card has not increased much (This happens for me when i get the credit limit bump letter from wells fargo in the mail after every 6 months, and im pretty sure i had requested a credit increase once and it been denied) It has only gone from $500 to $1600 in 2 years and i would like to know if credit limit requests cause hard checks and how i should go about requesting raising the limit on this credit card and any other credit cards i get in the future as fast as possible without getting denied?

I have a friend that had horrible credit and now is already got to the low 600s within 6 months from starting with two secured credit cards and now up to 6 or 7 regular credit cards (subprime, high AF and high interest though). It seems like this is a great strategy for someone coming out of a delinquent or bad credit situation, but would this be advisable for someone like me who is trying to build up from 700 and have a squeaky clean credit history? The perks look to be making payments on/managing a larger revolving credit amount and a lowered debt-credit ratio both of which should help my credit building goals. But my concern here is having too many hard credit inquiries for credit cards within a short amount of time and that either hurting my credit score or getting my applications rejected which no one wants. I just applied for an AMEX Gold yesterday and got approved, but i am itching to start filling out the credit card applications that flood my mailbox coming from citibank and capital one and start going to town on building my credit after my last year of credit building effort being a complete flop. Is there a general rule of thumb for time lapse between sending applications?

The new AMEX with a NPSL also is bringing up a new confusion for me, how should I calculate my debt-to-credit ratio with that and one other credit card being a $1600 limit Wells Fargo card?

And finally, what kinds of cards should i be shooting for at my stage of credit building? Should I be shooting for tougher and more serious cards (I have my eye on a chase sapphire next) or just use my friend's approach and take anything that comes in the mail from capital one or credit one to stat building as much credit as possible and just cancel them after a year when they have served their purpose? (i do not care about how high interest rates are because i never carry balances and dont care about any annual fees because im willing to spend money on annual fees to build my credit)

Your help, suggestions, opinions, and comments are all much appreciated.

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Postby Robrus1 » Thu May 23, 2013 10:35 pm

Your utilization of 50% plus could be hurting your score somewhat. I'd try to pay your balance in full a few days before the closing date of your new statement. (when it generates). Since you just got a gold Amex, you might app for one more card to help your overall credit utilization and general available credit amounts, or request a credit limit increase on your Wells Fargo card, but I wouldn't call that a mandatory move. Don't just app for whatever junk you get in the mail.

Stay away from Capital One, unless you just really want something specific they offer. With your score you should be past them. Pre-approval junk mail doesn't mean guaranteed approval so if you do app for another card, app for something you can benefit from. Don't go on an app spree and apply for a bunch of cards because that will lower your score, and make you appear desperate for credit (red flag) to potential lenders.

What kind of cards you should be shooting for should probably something you need to answer for yourself. I mean it depends how much you spend a month, what you spend it on, and what sort of rewards you prefer. (cash back, points, travel rewards, etc.)

My last bit of advice is be patient, and it sounds like you have so far, but continue to do so. Do NOT pay late and try to let your CC statement report a small balance, like under 10% of your available credit.
Amex Platinum
Amex BCP 21K
Amex SPG 5K
Barclaycard Arrival Plus WEMC 5K
Chase Sapphire Preferred 23.5K
Credit Union 10K
Discover IT 7.75K

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Postby im_mr_awesome » Thu May 23, 2013 11:38 pm

Having a wide variety of credit accounts (loans, credit cards, etc) builds a stronger credit profile than just one credit card and an auto loan. While having a good history with your auto creditor *does* help, having a good variety of credit cards to build up your profile does help. To continue building your score, I'd suggest a good rewards card like a Chase Sapphire or Freedom card. Discover is excellent and I have personal experience with their customer support--they really are wonderful. You can't go wrong with AMEX, but since you already have a Gold card, I'd suggest either the BCE or another bank for a premier rewards card.

For the credit limit increases, you are unlikely to get them without showing the lender you have the ability to pay much more than the minimum. If your minimum is $30 and you have a balance of $1000, pay $100 if you can. More is better, of course. Don't worry so much about not carrying a balance, but instead just try to have your balance in the 1-10% range before the end of your billing cycle. Using the card responsibly and regularly, all while making much more than the minimum payment, is a sure way to get CLIs, assuming you are dealing with a bank that will give them to you. Capital One, for instance, is horrible for CLIs. The thing about CLIs is that they aren't always a hard pull. Only hard pulls hurt your score. Soft pulls don't hurt your score.

I'd highly recommend being patient, letting your cards age, and let them report a healthy account. In about 6 months, app for one or two really good cards without annual fees. Then, every 6 to a year you should ask for a credit limit increase with a SOFT PULL. Unless you can get a $3k+ increase, I would not take a hard pull. I would not go for high interest cards, because high interest cards are usually sub prime cards with low limits (Cap1 limits their subprime cards to $3000 in most cases). With a healthy AMEX Gold card and a good history of at least 2 years, you shouldn't have problems getting prime cards with 8-15% APRs and $5k+ limits.
Scores on the mend...
FICO: 650 (Discover/TU, 6/23/2016)
Cards I Use Citi Double Cash, Chase Amazon, Capital One QuickSilver
Sock Drawer Discover IT, Citi Diamond Preferred, AE Visa, QuickSilver One, Walmart CC, CareCredit, CreditOne (keeping for history for now)
Short Goal Reach 680

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Postby reychan » Thu May 23, 2013 11:40 pm

noted. awesome post, very helpful. To be honest im not really interested in rewards points or incentives I just want something with a high credit limit, and from a reputable bank or credit agency that i can build a relationship and eventually trade up to a serious card. Even at the expense of high interest rates (as i have used my regular wells credit card just like a charge card and paid the balance monthly) and annual fees, im just looking for a high credit limit at the end of the day.

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